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In the last MBA Life blog post, I wrote about why you should get an MBA. In this article; I am going to discuss the return on investment in an MBA or a master of business administration degree.  While obtaining your MBA takes some serious work and definitely some money, the MBA degree can help you develop new skills and launch your career, but is the MBA worth it? Whether you are a recent graduate, or a professional looking to have an advantage when being considered for management positions, a Master of Business Administration can open countless doors of opportunity. The question is – will two more years of education be worth the time, money, and effort? Let’s take a look at some numbers and see if an MBA is worth the investment.

When reviewing the numbers, they seem to indicate a strong yes. In 2018 Quacquarelli Symonds released a report about the ROI of MBA degrees. The average 10-year return on investment in the USA was calculated to be $419,000. That’s an impressive ROI. Keep in mind the payoff for an advanced degree such as an MBA is a long-term process. (After ten years, the degree will continue to provide further returns as well.) Not all MBA alumni will follow the same path. Some will move into the highest-earning positions immediately; others will take their time climbing the career ladder; others still will look for satisfaction in different ways, perhaps working at a non-profit, where the salaries are lower. While we must add the caveat that this is an inexact science – given the plethora of routes and options open to MBA graduates – these calculations will shed some light on what the possible MBA return on investment is. In addition to the rather impressive 10-year ROI of $419,000, MBA candidates tend to recover their losses in around four years. In other words, after four years, you have earned enough more than they would without the MBA, to pay for all the costs associated with obtaining the degree and begin to make a return on the investment.

Many MBA’s enter an MBA program with the hopes of increasing their salaries at a greater rate, than they otherwise would have. MBA graduates are often successful at this metric as well. The same report by Quacquarelli Symonds noted a 73% average salary increase for graduates. The average MBA salary across the United States and for all schools in 2019 was $107,000 for graduates. This will obviously vary by type of position and years of experience, but it shows the exceptional potential for MBA graduates. Those with several years of experience can earn significantly more than the $107,000 average.

There are other non-financial metrics to consider when obtaining an MBA. The skills you learn and the network you develop with other driven people can impact you in profound ways after graduating and be the catalyst for career advancement. Another great reason to obtain an MBA, is when it comes time to select who gets promoted, an MBA degree can help set you apart from those that don’t have an MBA.

In today’s rapidly evolving economy, the MBA ranks among the most popular professional degrees around the globe. MBA programs blend advanced skills in business and management with practical experience to prepare graduates to start or advance in a management career in virtually any field they choose. Employers prefer MBA graduates because of the breadth and depth of their professional skills, field experience, and knowledge of business networks and relationships.

In the next MBA Life blog post, I will write about “How to Choose an MBA Program.” Until then, feel free to email me with any questions about the MBA degree or questions about our MBA program at Lourdes University – asinger@lourdes.edu, Professor Andy Singer.